JAPANESE global financial firm Nomura expects Philippine exports to remain weak for the rest of the year due to lower demand overseas.
Exports declined by a larger-than-expected 13 percent year-on-year in July after a 11.4-percent drop in June, led by weaker shipments of manufactured goods and petroleum products. The growth of electronic fell further to -14.8 percent from -5.1 percent in June.
“We still expect exports to remain weak over the remainder of the year given the external backdrop and as electronics demand is likely to soften... ,” Nomura said in a report over the weekend.
The Philippine Statistics Authority said earlier the decline in total merchandise trade in July stemmed from the slow global economic recovery.
The total revenue from trade in July fell from $12.2 billion in the previous year to $11.4 billion in July 2016. The PSA attributed the drop to the 13-percent decline in exports and the 1.7-percent decrease in imports.
The lower exports were due to the decrease in demand for Philippine products from traditional markets, such as Japan, China, Hong Kong and the United States. Meanwhile, the decline in imports was a result of the decrease in local demand for raw materials and intermediate goods (13.6 percent), as well as mineral fuel, lubricants (26.3 percent).
However, exports to the country’s non-traditional markets posted hefty increases, especially in France and Mexico, which grew 59.2 percent and 22.4 percent, respectively. Imports from Japan, China, Hong Kong and Singapore increased in July 2015.
Sales of coconut products, particularly coconut oil and desiccated coconut, and agro-based products rose 0.6 percent in July 2016, a relief from the four-month long double-digit decline since March.
However, Economic Planning Secretary Ernesto Pernia warned of the looming threat of La Niña, saying the government must ensure that policies to improve and strengthen the resiliency of agricultural communities were passed swiftly.
He said the outlook for the electronics industry was improving, particularly for semiconductors.
Almost all Asian countries, except for Vietnam (5.1 percent), experienced declines in export performance with Indonesia (-12.0 percent) and Malaysia (-10.2 percent) joining the Philippines with double-digit negative growth rates in July 2016.